Balancing act as Japanese PM meets Obama

Date: February 21 2013

Isabel Reynolds

The Japanese Prime Minister, Shinzo Abe, meets President Barack Obama in the US on Friday, seeking to bolster his country's key alliance as a bulwark against China's territorial claims and North Korea's nuclear ambitions.

Abe, 58, took office two months ago pledging to strengthen US ties and the two nations are in talks to beef up defence co-operation to reflect regional security threats. The summit takes place against a backdrop in which the yen has weakened 11 per cent against the dollar since he was elected on a platform of pressuring the Bank of Japan to increase monetary easing.

Japan's spat with China over uninhabited islands has fuelled concerns from American officials including the outgoing Defence Secretary, Leon Panetta, that the feud will escalate. At the same time, Mr Abe and Mr Obama are seeking stronger global sanctions against North Korea for this month's nuclear test that require support from China, the totalitarian state's only ally.

"Abe wants to develop a good working relationship with Obama and he wants to show the Japanese people that he's on top of the situation," said Jeff Kingston, a political science professor at Temple University's Tokyo campus. "The U.S. wants to reaffirm that the alliance is strong, but they also don't want to go too far in ways that might be deemed provocative in Beijing. It's a real tightrope."

Tensions have risen around the islands, known as Senkaku in Japan and Diaoyu in China, where ships and planes from both sides have tailed one another for months. Japan accused China of using weapons-targeting radar last month on a Japanese destroyer and helicopter in nearby waters.

While the US takes no position on the sovereignty of the islands, American officials say they are administered by Japan and thus fall under a bilateral defence treaty that would oblige it to respond if they were attacked. The Obama administration has repeatedly called for a diplomatic solution to the standoff.

The dispute "concerns us a great deal because it's the kind of situation where there are territorial claims that could ultimately get out of hand," Mr Panetta said at Georgetown University in Washington this month. "One country or the other could react in a way that could create an even greater crisis."

China criticised the then secretary of state, Hillary Clinton, last month for saying the islands were under Japanese administration, and that the US opposed any "one-sided" attempt to change the status quo. Asia's biggest economy also denied the radar allegations and accused Japan of smearing its reputation.

Buoyed by rising approval ratings, Mr Abe is increasing the military's budget for the first time in more than a decade. His administration began talks with the US last month on updating joint defence guidelines dealing with threats to or near Japan.

"There is a basic sense of vulnerability that the Japanese have related to the level of the American commitment in the East China Sea," said Richard Samuels, a political science professor at the Massachusetts Institute of Technology and author of Securing Japan: Tokyo's Grand Strategy and the Future of East Asia. "The United States has reaffirmed that repeatedly. It will surely repeat its commitments."

Japan, the world's third-largest economy, is struggling to escape three quarters of contraction and 15 years of falling prices. Mr Abe has pushed the central bank to be more aggressive in combating deflation, and will replace the Bank of Japan governor and his two deputies next month.

While European officials have expressed concern over the yen's decline, Group of 20 finance ministers this month signalled support for a Japanese stimulus as long as Mr Abe's ministers cease public advocation of a weaker currency. Mr Obama and his team may raise the issue with Mr Abe, Temple University's Kingston said.

"G-20 sort of gave them a light tap on the wrist, but more or less a pass," he said. "I think when he goes to Washington he's going to get a little sterner warning. Not in public, but perhaps in private."

In an unusual move, Japan's currency chief, Takehiko Nakao, will accompany Mr Abe on the trip, rather than the less senior official who usually joins such delegations.

Friction is also possible on the question of whether Japan will join regional free-trade talks. Mr Abe has said he won't join negotiations on the so-called Trans-Pacific Partnership if Japan is required to abolish tariffs across the board. At the same time, the Nik-kei newspaper reported Mr Abe will ask Mr Obama to allow exports of shale gas to Japan, a benefit that will in principle only be granted to countries with which the US has a free trade agreement.

The two leaders will probably find more common ground on the issue of North Korea, after agreeing by phone two days after the February 12 nuclear test to work closely together to impose more sanctions through the United Nations Security Council. Mr Obama reaffirmed in that conversation that the US "remains steadfast in its defence commitments to Japan."

Chief Cabinet Secretary Yoshihide Suga said on Wednesday that North Korea and the Asia-Pacific situation in general would be at the top of the agenda at the summit.

Increasing international sanctions against Kim Jong-un's regime requires the approval of China, North Korea's biggest trading partner and supporter. That could require delicate negotiations by the US.

"China's co-operation is key to the success of more serious sanctions against North Korea," said Tsuneo Watanabe, director of policy research at the Tokyo Foundation. "That means how to shape China's choices, or move China toward a more co-operative stance, is very much a common strategic interest between the United States and Japan."